Ethereum 2.0 completes its first step on December 1st as Ethereum 2.0 beacon chain goes live.
What is Ethereum 2.0
Ethereum 2.0 is a new version of the Ethereum blockchain network. The Ethereum network has been experiencing certain scalability issues, made explicit during the late Summer Defi fever. This new upgrade is targeting to introduce many improvements in terms of decentralization, resilience, security, scalability of the network and efficiency, but also in the network’s capability to process a higher number of transactions per minute.
The most prominent change introduced in Ethereum 2.0 will be the shift from the proof of work consensus mechanism (PoW) to the proof of stake (PoS) mechanism, planned for the new version.
What is Staking?
The current PoW consensus mechanism requires miners to solve problems in order to add a block to the chain, with an increasing problem complexity as more blocks are added to the blockchain. This problem solving also requires an increasing amount of computational power and energy consumption.
However, the newly deployed Proof of Stake (PoS) will rely on validators to stake Ether and alternate their turns to confirm transactions and to propose new blocks to the Eth2 blockchain, receiving rewards for their contributions (and also being punished to disincentivize misbehaviours). With this new consensus mechanism, any ETH owner will be able to act as a validator, either by running a node by themselves or using staking services.
What are Eth2 deployment phases?
Ethereum 2.0 will be introduced in different phases. The current deployment of the Phase 0 implements the beacon chain, and introduces proof of stake.
The beacon chain, also launched in this Phase 0, will handle the registry of the validators that will stake Ether. After deployment of the Phase 1, the beacon chain will also be responsible for synchronizing the information between the different shards, parallel blockchains within Eth2.
Following this phase, Phases 1 and 1.5, both planned to be rolled out during 2021, will introduce shards and turn Ethereum (Eth1) mainnet itself into a shard, as well as officially adopt proof of stake. Finally, Phase 2 will expect the full functionality of shards, including support for accounts and smart contracts, enabling transfers and withdrawals, and streamlining communication between the different shards.
What is CYBAVO plan to adopt Eth2?
As validators will be online from December first UTC noon, CYBAVO is already prepared to provide ETH2 staking service for our customers.
Get in touch with us to learn how you can start staking Ether and earn rewards starting today.